Q&A with 2016 GovCon Award Finalist Kevin Kelly, CEO, LGS Innovations

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Kevin Kelly, CEO of LGS Innovations

Kevin Kelly, CEO of LGS Innovations

The finalists for this year’s Greater Washington Government Contractor Awards were announced in September and WashingtonExec is bringing you its annual series with the nominees.

The Northern Virginia Chamber of Commerce and Professional Services Council have unveiled the finalists for the 14th Annual Greater Washington Government Contractor Awards, the premier awards event for the Washington area government contracting community. The winners will be named at a Nov. 1 gala dinner at the Ritz-Carlton Tysons Corner.

WashingtonExec talked with one of the finalists, Kevin Kelly, CEO of LGS Innovations, to get his take on leadership, among other issues.

WashingtonExec: Given today’s government contracting marketplace, how has your organization’s approach to customers, employees and future customers changed?

Kevin Kelly: LGS is known as being a high-value technology and innovation company. As such, we generally do not pursue opportunities involving commoditized technologies. Consequently, when the federal acquisition community began a movement toward lowest-priced, technically acceptable purchasing, it had minimal effect on LGS’s core business.

While some of LGS’s network integration business has seen some impact from this change in acquisition policy, the research and development and technology-enabled mission solutions parts of LGS (where LPTA usually does not apply) have seen little impact. Our continuing rapid growth reflects this long-term strategy for the company, where we have intentionally focused on continued development of highly differentiated technical solutions while resisting the temptation to pursue the expansive IT and staff-augmentation markets.

This strategy continues to pay dividends, and makes LGS much less susceptible to margin erosion. More favorable margins, in turn, enable LGS to reinvest in the creation of new, innovative solutions for the ever-changing mission space we serve.

WashingtonExec: What are the largest challenges that you predict your business will face in the next 5 years? We have seen many large, M&A transitions this year; do you anticipate this will continue in the future?

Kevin Kelly: As a technology and innovation company, one of the biggest challenges we expect to face in the coming five years is an appropriations trend that de-emphasizes government investments in R&D in favor of acquiring advanced technology solutions via newly established liaison offices and outreach to the venture investment markets.

Historically, the DOD budget supported investments in R&D to support the technology needs of the defense and intelligence communities. The trend of the past decade — and the foreseeable future — is to decrease government-funded R&D programs and instead seek technology solutions in the speculative commercial venture capital marketplace.

LGS, like several of its industry partners, understands the needs of the defense and intelligence community and is structured to develop innovative solutions specifically to address those needs (versus having to adapt purely commercial solutions after the fact). LGS’ solutions are derived from both commercial and custom-developed technologies but are focused solely on solving the challenges faced by the DOD and intelligence missions.

As LGS continues to grow organically and through acquisitions, another challenge we face is in locating other companies that share our culture of innovation, the ability to create highly technical-differentiated solutions, and a strong, demonstrated commitment to rigorous business ethics—and thus represent a good potential acquisition for us, such as Axios has been.

The model LGS has implemented (favoring investments in R&D to fuel growth) isn’t common in our industry, where many firms seek to acquire their way to mass market domination. While our strategy of focusing on technology-differentiated companies results in fewer M&A opportunities, we are evaluating several complementary companies where an acquisition could result in a “win-win-win” value proposition for LGS, a new potential subsidiary, and—most importantly—our customer base.

WashingtonExec: What would you say are the top one or two leadership qualities necessary to be a great leader?

Kevin Kelly: The leaders I admire most tend to do two things very well: they earn the trust of their colleagues and they communicate effectively. I emphasize “earn” because trust can’t be demanded or mandated. I have found the most effective way to earn trust is to demonstrate a passion for the business of the company, express my confidence in the value I see in my employees, and to lead by example. Lastly, and perhaps most importantly, trust is earned by demonstrating consistency through one’s actions.

With respect to communications, I have found that people will follow a leader who is able to convey the importance of the company’s business and support that with policy and decision-making that is well-communicated to the employees on an ongoing basis. Communications are also key when informing employees about the various successes throughout the firm. A simple weekly or bi-monthly email can be very effective in communicating good news throughout the company.

To be most effective, communications must be two-way. There’s no point in a leader trying to craft future strategies for the company while working in a vacuum. It takes time and effort, but I have found that consulting with my leadership team and employees to hear and understand their ideas and concerns is the only way to forge a strategic plan that makes sense for LGS. In my regular visits to our locations around the country and in an ongoing series of quarterly, online town halls, I value the chance to listen to LGS employees—and adjust our future direction based on their input.

WashingtonExec: If we were to speak directly to your leadership team, what would they say is your management style?

Kevin Kelly: I’d like to think “collegial” would be the first adjective my team members would offer, if asked about my management style. It is my pleasure and honor every day to work with some of the smartest, most accomplished scientists and engineers in the world—and their work always reminds me that “there’s no such thing as a bad idea,” and that I’m rarely the smartest guy in the room—a mindset I’ve seen trip up other CEOs. I’ve learned to listen to my team’s ideas, and to incorporate their views into the strategic plans for LGS.

WashingtonExec: What was a turning point or inflection point in your career?

Kevin Kelly: My career took a major turn when I was asked to lead the creation of LGS as a separate subsidiary of Alcatel-Lucent. When Lucent and Alcatel (a French company) announced their intent to merge, I was asked to lead the stand up of LGS as a wholly owned U.S. subsidiary complete with R&D, products, and service programs focused on the U.S. federal government market, which needed to deliver all of its internal corporate business functions independent of the parent company.

Serving as the federal business chief of strategy, I was thrust into the role of corporate founder, where I worked closely with my general counsel, business development lead and various officers within ALU with oversight from officials in the U.S. government. During this foundational phase, I was also asked to help identify and hire a CEO who would then go on to run the business until his retirement five years later, after which the board of directors asked me to take over as CEO.

Related: Advancing Satellite Technology for Today’s Warfighter Drives Kevin Kelly, CEO of LGS Innovations

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